The price of oil will remain manageable, US consumers will begin looking for ever more powerful SUVs, and governments can afford to ignore fossil fuels in formulating policy.

Or was the recession primarily a consequence of peak oil? If it was the latter, the world is on notice that oil has entered its twilight years and fundamentally new approaches to transportation will be required to maintain accustomed standards of living.

In the absence of new solutions in the short to medium term, periods of prosperity will likely be punctuated by recurring oil price shocks and painful recessions as the world adjusts to a shortage of oil... (1 Nov 2009)

Uppsala University in Sweden today published a scathing assessment of the IEA's annual World Energy Outlook, saying some assumptions drastically underplayed the scale of future oil shortages.

Kjell Aleklett, professor of physics at Uppsala and co-author of a new report "The Peak of the Oil Age", claims oil production is more likely to be 75m barrels a day by 2030 than the "unrealistic" 105m used by the IEA in its recently published World Energy Outlook 2009. The academic, who runs a Global Energy unit at Uppsala, described the IEA's report as a "political document" developed for consuming countries with a vested interest in low prices.

The report from Aleklett and others, including Simon Snowden from the University of Liverpool, says: "We find the production outlook made by the IEA to be problematic in the light of historical experience and production patterns. The IEA is expecting the oil to be extracted at a pace never previously seen without any justification for this assumption."... (12 Nov 2009)

Oil reflects dollar moves, not market dynamics: YerginJennifer Tan, Reuters Current oil prices are the result of financial market gyrations and do not reflect the supply-demand dynamics of the physical market, energy consultant and prize-winning author Daniel Yergin said on Monday.

Crude oil benchmarks are holding near $80 a barrel, having doubled from under $40 at the end of last year, after plunging during the financial crisis from all-time highs. But bulging inventories are keeping gains in check.

"Oil prices today do not reflect the world's supply and demand fundamentals. Instead, prices are reflective of the weak dollar and expectations of a strong economic recovery," Yergin told reporters on the sidelines of a conference.

On Monday, oil clawed back some of last week's 1.4 percent losses to above $77 a barrel, driven up by a weaker dollar and improved sentiment over the economic outlook.

U.S. crude rose to its highest this year at $82 on October 21 and rebounded nearly 73 percent so far this year, also helped by rallying equity markets. It turned positive on a rolling 12-month basis in the middle of last month for the first time since October 2008, raising the risk of commodity-led inflation... (16 Nov 2009)

The IEA is the energy policy adviser to the 28 countries of the Organization for Economic Co-operation and Development, among them Canada. The IEA produces a thumping annual report, called the World Energy Outlook (WEO), which is considered gospel among the many governments that use it to help formulate long-term energy policies.

To read the most recent WEO, released this week, you would think the planet is swimming in oil (CL-FT78.922.573.37%). So fear not - the "peak oil" mob is wrong. The peakists argue that the world will soon reach maximum-possible oil production, and may have already, after which humanity will begin a slow but sure descent into bedlam and bankruptcy. That's because oil consumption and GDP growth are directly linked. Cut the first and the second can only follow.

The WEO authors don't buy into the peakist theory, never have and probably never will. The WEO expects oil production to reach about 105 million barrels a day by 2030, up from last year's 85 million. The production estimate is essentially unchanged from last year. So forget the pokey little hybrid - buy that V8-powered truck you've been dreaming about.

But the WEO team, led by chief economist Fatih Birol, is increasingly finding itself on the defensive. A small but growing number of scientists and oil executives think the WEO is out of touch with reality, that it is a creating false - and highly dangerous - sense of confidence... (12 Nov 2009)

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